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ETFs Market Bleeds Profusely: $742 Million Escapes in Three Days

Recent outflows in spot Bitcoin ETFs signal that the market could be shifting into a bearish gear

United States-listed spot Bitcoin Exchange-Traded Funds (ETFs) have experienced a considerable decrease in holdings, marking the third consecutive day of net outflows. Specifically, these funds have seen a total of $261.5 million withdrawn on March 20, contributing to a cumulative three-day outflow of $742 million. The decline commenced on March 18 and 19, with net outflows of $154.3 million and $326.2 million respectively, as reported by Farside Investors.

The largest outflow was observed from the Grayscale Bitcoin Trust (GBTC), which saw a reduction of $386.6 million. The Invesco Galaxy Bitcoin ETF (BTCO) also noted a withdrawal of $10.2 million, overshadowing the minor inflows recorded by the remaining eight approved ETFs. Despite these substantial outflows, BlackRock’s iShares Bitcoin Trust (IBIT) and the Fidelity Wise Origin Bitcoin Fund (FBTC) experienced relatively low net inflows of $49.3 million and $12.9 million, respectively, barely offsetting the broader trend of capital withdrawal from the sector.

Market dynamics and Bitcoin's halving countdown

The recent net outflows from spot Bitcoin ETFs occur amidst notable market movements, particularly as Bitcoin itself showcases volatility. Despite the withdrawal trends, Bitcoin's price has witnessed an upward trajectory, gaining over 3% during U.S. trading hours and recording a 7.5% increase over 24 hours to reach $66,832. This growth comes after a slide from its March 14 peak, setting the stage for the cryptocurrency's halving event, scheduled to reduce mining rewards by 50% in the coming month.

Historically, Bitcoin's value has shown a tendency to decline in the period leading up to its halving events. The current market pattern aligns with this historical trend, as evidenced by data from CoinMarketCap. With the halving countdown entering its final 30 days, market participants are closely watching the impact this milestone might have on Bitcoin's valuation and the broader cryptocurrency ecosystem. The anticipation surrounding the halving event is palpable, given its potential to influence supply dynamics and, consequently, Bitcoin's price in the long term.